From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #547 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes canslim-digest Saturday, March 6 1999 Volume 02 : Number 547 In this issue: [CANSLIM] Today's Market Re: [CANSLIM] Today's Market [CANSLIM] How do short sellers get killed? [CANSLIM] General Canslim Question Re: [CANSLIM] General Canslim Question Re: [CANSLIM] General Canslim Question [CANSLIM] Pyramiding/Money Management Re: [CANSLIM] Pyramiding/Money Management [CANSLIM] Intraday record? Re: [CANSLIM] Pyramiding/Money Management Re: [CANSLIM] Intraday record? [CANSLIM] Anyone buying these days? Re: [CANSLIM] Anyone buying these days? Re: [CANSLIM] Anyone buying these days? [CANSLIM] Accuracy of Sentiment Indicators [CANSLIM] DCLK - classic cup & handle [CANSLIM] DGO New Highs [CANSLIM] Acc/Dis numbers ---------------------------------------------------------------------- Date: Fri, 5 Mar 1999 06:48:23 -0500 From: "Tom Worley" Subject: [CANSLIM] Today's Market Major rally in Japan overnight, up over 700 points for a 5% gain. And this time the rally lasted all the way to the close. Rest of Asia followed but none with such an impressive gain. Let's see, is one 5% day better or worse than five 1% days? Hummmm. In Europe, most are following Asia upward, Russia being the biggest percentage gainer. Futures are also indicating a positive opening, however between now and the open will come major economic reports including Feb's employment report. And with the fear of the Feds raising rates, that report if too strong could upset the apple cart. Tom W stkguru@netside.net ICQ # 5568838 - - ------------------------------ Date: Fri, 05 Mar 1999 07:13:57 -0500 From: "Frank V. Wolynski" Subject: Re: [CANSLIM] Today's Market At 06:48 AM 3/5/99 -0500, you wrote: >Major rally in Japan overnight, up over 700 points for a 5% >gain. And this time the rally lasted all the way to the >close. Rest of Asia followed but none with such an >impressive gain. Let's see, is one 5% day better or worse >than five 1% days? Hummmm. > I'll take the five 1% days. ( Magic of compounding ya know.) Frank - - ------------------------------ Date: Fri, 05 Mar 1999 08:28:23 -0800 From: David Reid Subject: [CANSLIM] How do short sellers get killed? take a look at levl analyst downgrade yesterday then they announce after hours that intel is buying them at a huge premium to the days close.. Do you think that analyst's phone is going to be ringing today?? - - ------------------------------ Date: Fri, 5 Mar 1999 09:02:40 -0500 From: "Robert Miller" Subject: [CANSLIM] General Canslim Question In HTMMIS, and other sources, WON said to avoid buying stocks off of 3rd or 4th stage bases. My question is what resets the clock. After a stock has been moving up for an extended period and has formed 3 or 4 bases, it is no longer a buy candidate. What has to happen in order to begin counting at one again. A bear market? A correction of a certain proportion in the stock? Thanks, Rob - - ------------------------------ Date: Fri, 5 Mar 1999 09:14:36 -0800 From: "Peter Newell" Subject: Re: [CANSLIM] General Canslim Question Robert, In their tapes etc they mention that most runs last around 18 months. Of course the best stocks violate this and all other rules. One thing I have been doing is going back after each rally and seeing which stocks had the best run off a new high and using that as a starting point for the next rally. I want to go back and do this for as many rally's as I can to see what it looks like but it will be awhile before I finish that project. Anyhow slowing growth is a good time to sell some. DELL is starting to look like this I think it has more than four bases but it would be worth reviewing. DELL is also a good example of how a stock can run after the EPS numbers are in. It only achieved an EPS of over 80 after 5/97 and was a 99 EPS and 99 RS and completed the last have of its run since then. Peter Newell - -----Original Message----- From: Robert Miller To: Canslim Date: Friday, March 05, 1999 6:03 AM Subject: [CANSLIM] General Canslim Question >In HTMMIS, and other sources, WON said to avoid buying stocks off of 3rd or >4th stage bases. My question is what resets the clock. After a stock has >been moving up for an extended period and has formed 3 or 4 bases, it is no >longer a buy candidate. What has to happen in order to begin counting at >one again. A bear market? A correction of a certain proportion in the >stock? > >Thanks, >Rob > > > >- > - - ------------------------------ Date: Fri, 05 Mar 1999 09:37:52 -0500 From: Craig Griffin Subject: Re: [CANSLIM] General Canslim Question Rob, My guess is a bear market or possibly a major correction (15% or more) resets the clock. Generally in a new bull market - there are new stocks that assume leadership. So I think he assumes you would at that point be picking up the new leaders. If the old leaders resume, then they should have a nice base to launch from at that point. I have never heard or read an answer from WON or Ryan on this. See additional thoughts interspersed below. You wrote: >In HTMMIS, and other sources, WON said to avoid buying stocks off of 3rd or >4th stage bases. My question is what resets the clock. After a stock has >been moving up for an extended period and has formed 3 or 4 bases, it is no >longer a buy candidate. Not strictly true (AFAIK without re-reading the appropriate sections of HTMMIS). My sense has been that WON says to generally avoid 3rd and 4th stage bases because they are more failure prone. However, like anything, with the right stock and the right base and the right market environment, I believe he would on occassion buy a 3rd or 4th stage breakout. Take a big LEADER in an ongoing bull, following an 8 or 10% pullback in the market, in which the leader formed a tight base. There were probably 3rd and 4th and 5th stage bases for DELL that were buyable in its recent advance. Try charting dell back to about 1994 on a weekly basis and overlay a chart of the NASDAQ. This would be an example of a somewhat unusual case. >What has to happen in order to begin counting at >one again. A bear market? A correction of a certain proportion in the >stock? See answer above. I would also think that a long and significant base in the stock resets the clock as well, regardless of bear market or bull. For example take a look at WMT from 1993 to 1997 (long base) and subsequent breakout. For the most part the avoid 3rd and 4th stage bases applies, however. Many, many stocks fail at this stage (also remember, the market has been running for a while for them to get to this stage, so the market is often ready to drag them back anyway). Best Regards, Craig - - ------------------------------ Date: Fri, 5 Mar 1999 09:41:53 -0800 From: "Peter Newell" Subject: [CANSLIM] Pyramiding/Money Management Can anyone give my some examples of how pyramiding/money management would work. Is this something discussed in the advanced seminars? Thanks, Peter Newell - - ------------------------------ Date: Fri, 5 Mar 1999 09:16:57 -0600 From: "Ricardo Bekin" Subject: Re: [CANSLIM] Pyramiding/Money Management with tongue firmly planted in cheek, this is how ONE version of pyramiding works: you sign up a client who gives you $100; you sign up a second customer and tell the first one you've doubled his money, he has $200 with you, and you send a phony statement to the second customer; your "good" results with the first customer attract more customers to you; with each new customer you tell some of the old ones how you've doubled their money eventually you take all of the money, get on a plane to [insert your favorite island name here], and hope the FBI/CIA/SEC/whoever does not find you advanced seminars taught in most State Penitentiaries Ricardo - ----- Original Message ----- From: Peter Newell To: Sent: Friday, March 05, 1999 11:41 AM Subject: [CANSLIM] Pyramiding/Money Management >Can anyone give my some examples of how pyramiding/money management would >work. Is this something discussed in the advanced seminars? > >Thanks, > >Peter Newell > > >- > - - ------------------------------ Date: Fri, 05 Mar 1999 07:37:44 -0800 From: Tim Fisher Subject: [CANSLIM] Intraday record? What are these guys smoking? DJI at 9675 & therefore US stocks at an intraday record? How about "the Dow 30 at an intraday record"? Anyway I love this complete lack of understanding of the market. From Reuters Securities no less. U.S. stocks soar to new intraday record shortly after the open following the release of February employment data. Jobs data generally in line with views, soothing inflationary fears. CompUSA rating cut after earnings warnings. Long-bond up 2-5/32 pts, yield 5.56 pct. Dow up 194, S&P up 25. Nasdaq up 39. Anyway, assuming this holds, are we at 2 consecutive 1% up days on volume? Saw no analysis of yesterday's M on the list & I don't have the volume figures. Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - ------------------------------ Date: Fri, 05 Mar 1999 09:58:22 -0500 From: Craig Griffin Subject: Re: [CANSLIM] Pyramiding/Money Management Peter, >Can anyone give my some examples of how pyramiding/money management would >work. Is this something discussed in the advanced seminars? Here is a repost of something I wrote on the subject many moons ago ... Best Regards, Craig Date: Tue, 26 Nov 1996 00:56:02 GMT X-Sender: cagriffin@pop.mindspring.com X-Mailer: Windows Eudora Light Version 1.5.4 (16) To: canslim@xmission.com From: Craig Griffin Subject: Re: [CANSLIM] Pyramid Buys Sender: owner-canslim@xmission.com Reply-To: canslim@xmission.com Dean, At 08:18 PM 11/25/96 +1300, you wrote: >Question: Does anyone have any thoughts, experiences, warnings about >pyramiding a stock? I would like to know how people go about it. >This is just an observation of mine. I am very wary trying this in a small >float. I'm not sure I mean the same thing by pyramiding that others do. In a class that O'Neil gave, he gave examples of how to divide a portfolio. The gist is that one should not own more than 2 to 8 stocks at one time, for a number of reasons, which I will not get into here. But 2 stocks would be for a portfolio of say $10k to $25k, 3-4 stocks for a portfolio of $25k to $400k, 6 stocks for one of $400k to $1,000,000, 8 stocks for $1,000,000 +. Then the concept is that each full "position" in a stock is equal to n% of your portfolio. Lets say you have a 100k portfolio and have decided to own 4 stocks, then a "full position" would be 1/4 of the portfolio or 25% of $100,000 = $25,000. So what does this have to do with pyramiding? Here's what I understood him to say, although, I am not sure he ever called it pyramiding. On the day a stock you are going to buy breaks out to a new high, you buy a "partial position". With the 100k portfolio divided into 4 stocks, you would buy say $17k worth of XYZ the day of the breakout. The next day or two or three you would watch it and if it continued to "act right", you would buy another $5k worth of XYZ (now you have $22k invested). A little bit later you might buy the remaining $3k ending up with a full position. His assumption is that you would catch it at the breakout and buy maybe 2% or 3% at most above the pivot point on your initial buy. Then it might move up another couple of % and a day or two later, you might buy another, but smaller partial position (see example in previous paragraph). Then it might pull back a bit and then move up again with some volume and you would buy a final and even smaller partial position. The idea is that on your first buy you get a bit more than 1/2 a position. Then you follow up with one or two more buys to fill out a full position. "Wait a minute!", you say, "these things often take off like rockets and move 10% the first day and never look back". I guess his attitude is that that is a good problem to have, just don't chase it. In that case you would end up with 1/2 position. So now you might end up with 5 stocks in your portfolio rather than the original 4 you had planned. So, IMO, the pyramid buy can also be when your stock takes off like a little rocket and then within the first week or so after launch, begins to pull back to the break point on reduced volume. At that point, as it bounces off the pivot, you get a second chance to buy. If you already own the stock with a half position, then you can "pyramid" on your original purchase as it pushes off again (ie. buy the other half position). The idea is to start out with slightly reduced risk via a less than full position in the stock, and then add to your initial holdings as the breakout proves itself out with the stock "acting right". The pyramid concept is that you buy your first partial postion, the base of the pyramid, (ie. the largest part) on the first buy, then successively make 1 or 2 more buys which are each smaller than the last to finish the pyramid. ^ 10% / \ = Third buy in XYZ Corp = $3k --- / 20% \ = Second buy in XYZ Corp = $5k ------- / 70% \ = Initial buy in XYZ Corp = $17k ----------- Note that the percentages and numbers above are approximate. Also note that none of the purchases above should occur more than 10% off the pivot point at the absolute most and the Initial Buy should occur within 5% of the pivot point. Hope this helps. Best Regards, Craig - - ------------------------------ Date: Fri, 05 Mar 1999 10:52:30 -0500 From: Craig Griffin Subject: Re: [CANSLIM] Intraday record? Tim, You wrote: >Anyway, assuming this holds, are we at 2 consecutive 1% up days on volume? >Saw no analysis of yesterday's M on the list & I don't have the volume >figures. Yesterday's 1% up was the second day of the rally and thus does not count. Today's does count if volume is higher (yesterday = 894 million). Almost this identical pattern happened on 2/18, 2/19, and 2/22. The third day up, 02/22/99 was a followthrough day with higher volume and big % gain (low 2275, high and close at 2342). Yesterday we closed at 2292 and as I write this we are at 2330. Today's close may tell the tale (if we get excellent volume and push ahead through the close, I will be mostly convinced). The end result will look like a 2B pattern on the NAS, with nearly identical 3 day rallies off the bottom. Note that the pullback this second time did not undercut the low set on 02/18/99. So, in one sense, the followthrough day of 02/22 is still in effect. The S&P and DJ30 are closing in on the top of their recent range. A breakout by those indexes with good volume sometime soon would be nice too. In a sense that would give them the leadership position over the NAS at this point - OR - conversely, you might just say they are catching up with the NAS from back on 12/18/98 (compare the 3 chart patterns to see what I mean). Best Regards, Craig - - ------------------------------ Date: Fri, 05 Mar 1999 07:45:38 -0800 From: John Allen Subject: [CANSLIM] Anyone buying these days? Hi group, Is anyone one this list looking at or buying anything these days? I notice that the Acc/Dis numbers continue sliding lower and lower (thank you Robert!), that makes me reluctant to buy anything new. John R. Allen - - ------------------------------ Date: Fri, 05 Mar 1999 11:34:49 -0500 From: Craig Griffin Subject: Re: [CANSLIM] Anyone buying these days? John, You wrote: >Is anyone one this list looking at or buying anything these days? I notice that >the Acc/Dis numbers continue sliding lower and lower (thank you Robert!), that >makes me reluctant to buy anything new. I agree that technically, there are many causes for concern with this bull market. It really does look feeble. I am still holding some mattress stuffers like CSCO, LU, PFE and one or two other things. Have not been buying lately (although I was very tempted by EBAY's breakout). There are a few stocks that are on the move with breakouts, especially in the Internet (see RNWK) and Biotech (see BGEN) groups. The advance is narrow, but there are opportunities in some of the leaders. Problem is - there are not that many and some are quickly failing. With luck we should be seeing a lot of bases forming up before long. NAS peaked about 6 weeks ago. Give it another couple of weeks and we should have a lot of 8-10 week bases in leadership stocks ready to launch (or not if the market reverses and slides below 2225 on the NAS). A few are now launching from 5-7 week bases as I mentioned above. I am sitting on my hands because I have been working on other stuff lately - - hoping to get it done before a serious rally develops and because I am not yet convinced (see my post to Tim). I have not yet been hunting for bases, so have no idea what is ready to go. It may be about that time though. Best Regards, Craig PS. To look at an aid I use to monitor the market intraday - go here http://www.quote.com/cgi-bin/jchart-form?genApplet=yes Then click on $COMPX to see a NAS chart. Then select CANDLE from the "Chart" pulldown menu on the left. Maybe add "Moving Average" (10) from the "None" pulldown menu at the bottom. Then play with looking at 10, 15, 30, 60 minute and daily charts in the Time pulldown menu. For this rally to mean much, we ought to form a nice little base on the intraday (15 or 30 minute chart) to launch from over the next day or two. We might even form a cup w/handle with the high so far today forming the left side of the cup. If we start having big RED down bars near the close today without a bounce, instead of a nice tight intraday base (with or without breakout) - I will be less convinced. So far, at 11:25 am, the pullback looks fairly smooth on a 15 minute chart - could be the left side of a cup or beginning of a flat base - if we don't collapse out of it. Also so far today, volume is at about a 900 million rate, but that could change by the close. One day at the time ... - - ------------------------------ Date: Fri, 05 Mar 1999 11:50:30 -0500 From: Craig Griffin Subject: Re: [CANSLIM] Anyone buying these days? Two other things - the NAS 50 dma is at about 2325, and we just pulled back and bounced off of that intraday. So we are back above it at the moment after a few days below it. Also, it looks like Connie's 3,7,10 dma may be about to go positive on the NAS (short term, daytrader signal). But it had a somewhat similar look to it back on the 22nd and didn't make it. - - ------------------------------ Date: Fri, 05 Mar 1999 15:24:57 -0500 From: Walter Stock Subject: [CANSLIM] Accuracy of Sentiment Indicators As readers of this list may have read by now, I have recently started to question the accuracy of the sentiment indicators that I have been following for a long time. The following is a (free) article from thestreet.com, which makes the case that sentiment indicators are every bit as accurate as flipping a coin. http://www.thestreet.com/markets/marketfeatures/721314.html I don't know if the indicators are as bad as that. Does anyone know of a website where sentiment is charted, going back a dozen or more years? I would like to overlay the data with one or more index charts. Jeffry or Tom or anyone else? Thanks, Walter - - ------------------------------ Date: Fri, 5 Mar 1999 14:49:03 -0800 (PST) From: Anindo Majumdar Subject: [CANSLIM] DCLK - classic cup & handle DCLK broke out of a classic cup & handle taking out its old high. Anindo > > As readers of this list may have read by now, I have > recently started to question the accuracy of the > sentiment indicators that I have been following for a > long time. > > The following is a (free) article from thestreet.com, > which makes the case that sentiment indicators are > every bit as accurate as flipping a coin. > > http://www.thestreet.com/markets/marketfeatures/721314.html > > I don't know if the indicators are as bad as that. > > Does anyone know of a website where sentiment is charted, > going back a dozen or more years? I would like to overlay the > data with one or more index charts. > Jeffry or Tom or anyone else? > > Thanks, > > Walter > > > - > > - - ------------------------------ Date: Sat, 6 Mar 1999 04:23:27 -0500 From: "Tom Worley" Subject: [CANSLIM] DGO New Highs An interesting week, with a climatic Friday, normally a day for squaring positions and taking profits ahead of a weekend. Instead, on the back of a tame jobs reports, the Dow leaped up on the open, stayed there the entire day, and not only didn't sell off towards the close but rose even higher to a closing record. Bodes well for Monday. The number of Daily Graphs stocks hitting new highs for the past week dropped slightly to 152, however the ones on the list meeting the basic test of 80/80 for RS/EPS rose slightly to 74. The Dow was the big winner among the indexes for the week, up 4.6%, while Nasdaq was up 2.1%, R2000 a measly 1.4%, S&P100 up 3.1%, S&P500 up 2.9%, and VIX continued to drop another 14.9% to 25.12 as it approaches the sub 20 range where volatility is healthiest for CANSLIM stocks. Worth noting that of all the stocks in the DG books that made new highs in the first four days of the week, only 18 failed to make another new high on Friday (HINT: since my list is in chronological order, they'll be the first 18 on the list). Here's the list of the survivors: BELFB, FWRD, ABE, XYLN, EXPD, CSN, BELFA, RICA, BSYS, ANSR, ZLC, TOM, WAT, OSSI, ALSI, OCLI, MM, AEOS, COMR, HH, PFE, LOW, ISCA, NTRS, CCRD, GDT, CLFY, SCH, ASO, COST, FTEN, VMC, ANF, EAGL, SEBL, ABDR, MWD, GPS, ZION, CLE, ZQK, EBAY, TJX, ADVP, RHT, FON, LEVL, QCOM, POS, RFMD, SDLI, HD, KSS, FOSL, STT, PVN, AFS, WMT, DY, AGN, ELN, MDS, AXP, MMC, EL, DH, BJ, UTX, CHD, LLY, NAV, SHX, MRK, CTS. Happy Hunting! Tom W stkguru@netside.net ICQ # 5568838 - - ------------------------------ Date: Sat, 6 Mar 1999 12:10:12 EST From: FBNAirPlt@aol.com Subject: [CANSLIM] Acc/Dis numbers Here are the latest Acc/Dis numbers: 1 Pt. improvement in a+b/a:e, but %e still high at 9% Date A B C D E AB/A:E %E 2/22/99 911 2428 1423 1293 571 50% 9% 2/23/99 913 2453 1414 1297 551 51% 8% 2/24/99 965 2491 1378 1279 522 52% 8% 2/25/99 964 2477 1381 1279 535 52% 8% 2/26/99 925 2431 1419 1307 551 51% 8% 3/1/99 882 2414 1404 1346 574 50% 9% 3/2/99 855 2389 1450 1330 573 49% 9% 3/3/99 848 2394 1421 1374 564 49% 9% 3/4/99 831 2416 1417 1332 574 49% 9% 3/5/99 811 2384 1428 1354 599 49% 9% 3/8/99 820 2437 1384 1356 578 50% 9% Spreadsheet version Date,A,B,C,D,E,AB/A:E,%E 2/19/99,900,2427,1419,1307,577,50%,9% 2/22/99,911,2428,1423,1293,571,50%,9% 2/23/99,913,2453,1414,1297,551,51%,8% 2/24/99,965,2491,1378,1279,522,52%,8% 2/25/99,964,2477,1381,1279,535,52%,8% 2/26/99,925,2431,1419,1307,551,51%,8% 3/1/99,882,2414,1404,1346,574,50%,9% 3/2/99,855,2389,1450,1330,573,49%,9% 3/3/99,848,2394,1421,1374,564,49%,9% 3/4/99,831,2416,1417,1332,574,49%,9% 3/5/99,811,2384,1428,1354,599,49%,9% 3/8/99,820,2437,1384,1356,578,50%,9% Robert - - ------------------------------ End of canslim-digest V2 #547 ***************************** To unsubscribe to canslim-digest, send an email to "majordomo@xmission.com" with "unsubscribe canslim-digest" in the body of the message. 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